1. All expenses of an entity are classified as either distribution costs (selling expenses) or administrative expenses under the function of expense method. 2. The only difference between the function of expense and the nature of expense methods is the presentation of "cost of goods sold" under the function of expense method. 3. The main difference between the function and the nature of expense methods is the segregation of operating and non- operating items under the function of expense method.
1. All expenses of an entity are classified as either distribution costs (selling expenses) or administrative expenses under the function of expense method. 2. The only difference between the function of expense and the nature of expense methods is the presentation of "cost of goods sold" under the function of expense method. 3. The main difference between the function and the nature of expense methods is the segregation of operating and non- operating items under the function of expense method.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![-PROBLEM 1: TRUE OR FALSE
1. All expenses of an entity are classified as either distribution
costs (selling expenses) or administrative expenses under the
function of expense method.
2. The only difference between the function of expense and the
nature of expense methods is the presentation of "cost of
goods sold" under the function of expense method.
3. The main difference between the function and the nature of
expense methods is the segregation of operating and non-
operating items under the function of expense method.
4. Freight-in is presented as distribution cost under the function
of expense method.
5. PAS 1 requires an entity to provide additional disclosures
when it uses the nature of expense.method.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fae2d0580-023f-4929-8c80-98a509ed244c%2Fb9a05d84-2fdc-4fbe-8f80-35cc06ab06d5%2Fhp39f2f_processed.png&w=3840&q=75)
Transcribed Image Text:-PROBLEM 1: TRUE OR FALSE
1. All expenses of an entity are classified as either distribution
costs (selling expenses) or administrative expenses under the
function of expense method.
2. The only difference between the function of expense and the
nature of expense methods is the presentation of "cost of
goods sold" under the function of expense method.
3. The main difference between the function and the nature of
expense methods is the segregation of operating and non-
operating items under the function of expense method.
4. Freight-in is presented as distribution cost under the function
of expense method.
5. PAS 1 requires an entity to provide additional disclosures
when it uses the nature of expense.method.
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